Why Bed Bath & Beyond shares spiked more than 350 percent this month

The housewares chain is the latest brick-and-mortar brand to move into meme-stock terrain on the power of online message boards

Bed Bath & Beyond ended the most recent quarter with sharply lower sales and a net loss of $358 million. (Andrew Kelly/Reuters)

Investors have been pouring into Bed Bath & Beyond, doubling the stock’s value this week and catapulting it up more than 350 percent in August, in a frenzied run driven largely by online message boards.

The surge was triggered after a regulatory filing showed activist investor Ryan Cohen was betting big on the big-box retailer. Cohen has had a devoted following of retail investors on Reddit’s spirited message boards since he became a central figure in last year’s GameStop saga. (A subsequent regulatory filing signaling his plans to sell his stake sent those boards abuzz and the stock price tumbling in after-hours trading Wednesday.)

In January 2021, GameStop shares surged from less than $5 apiece to more than $480, in a bet against the institutional wisdom of Wall Street. It was a remarkable turn for a brick-and-mortar business that, like other retailers, had seen its customers migrate online, forcing it to shutter hundreds of stores the year before. The run-up drew huge media attention and introduced the concept of “meme stocks,” showcasing the power of social media in steering everyday investors.

The drama was both a David vs. Goliath tale for the digital age and an online-casino-based tragedy, as many investors ended up on the losing end.

Though many novice traders got caught up in the hype and lost money — GameStop’s stock is half that of its peak closing price — the meme-stock phenomenon has carried on. Retail investors are again putting their money on the line for the same reasons that drew them to meme stocks last year: Many institutional investors are betting against the companies, representing a huge opportunity for gains, despite or because of the risks.

Student, 20, makes $110 million trading meme stock Bed Bath & Beyond